- Charles Evans, Federal Reserve Bank of Chicago President
Charles Evans, Federal Reserve Bank of Chicago President, reiterated his view that the US central bank should keep interest rates on hold until early 2016 and hike them gradually thereafter. Yet, Evans, a voting member of the policy-setting Federal Open Market Committee this year, said officials will decide on a meeting-by-meeting basis. He said while it is possible a case for tightening could be made in June, depending on the data, his outlook means he supports the current level of stimulus continuing. The Fed's official also added given that inflation has been running below the central bank's targeted level for a number of years, it would be worth considering to allow inflation to climb above the 2% goal for some time. The Fed's preferred gauge of price pressures, based on personal consumption expenditures, climb by 0.3% in March from a year ago and has been below policy makers' official target for 35 straight months. Evans did not see inflation reaching the 2% target until 2018. Commenting on the US labour market, Evans said that with 5.4% unemployment rate it is still around a half a percentage point higher than it should be. Evans also downplayed the US economy's weak first quarter, saying it was probably transitory.
Meanwhile, even though US homebuilder sentiment declined in May, the data showed more builders view market conditions as favourable. The NAHB/Wells Fargo Housing Market index slid to 54 from 56 a month earlier.
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